In the late 1960s, the Singapore Armed Forces (SAF) adopted the AR-15 as their main service rifle. Due to difficulties in obtaining the rifles from the United States, the Singaporean government purchased a license to domestically manufacture the M16 rifle, which was then designated the M16S1. However, the domestic rifle requirements were not sufficient to allow Chartered Industries of Singapore (CIS, now Singapore Technologies Kinetics) to economically maintain operations at its rifle factory. Export sales of the M16S1 were not a viable option. Due to the requirements of the license agreement, CIS had to request permission from Colt and the US State Department to allow any export sale, which they rarely granted.

In the early 1970s, Sterling engineers had developed their own 5.56 mm rifle design, the LAR, but this had been shelved when Sterling acquired a manufacturing licence for the US-designed Armalite AR-18 assault rifle. While Sterling could not legally sublicense the AR-18, their LAR design was available. As a result, the new Singapore rifle design closely resembled the LAR with certain AR-18 elements.